The end of art as an asset class

UBS recently signed on to continue as lead sponsor of Art Basel through 2011. Oops. Maybe that wasn’t such a smart idea, given that it’s just closed down its entire art-advisory division.

UBS was always well placed to be the last man standing in the inevitable shakeout of art-advisory departments in investment banks. It had the most rich clients, and it invested by far the most money in pushing itself as the only bank which could manage both dollars and Diebenkorns. So this announcement is pretty shocking — but also a little heartening, to those of us who love art for its intrinsic rather than its monetary value.

Maybe we can date the top of the market to the 2007 pronouncement by Tobias Meyer of Sotheby’s, who said that “the best art is the most expensive because the market is so smart”. Of course the art market wasn’t the only market which ended up proving to be rather less intelligent than its participants had believed.